Asian session review: the US dollar is showing positive dynamics

During today's Asian trading, the US dollar rose slightly against major currencies, partially offsetting yesterday's drop. Overall, investors have taken a wait-and-see attitude ahead of the March Fed meeting, the results of which will be announced on Wednesday.

The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) rose by 0.16% to 103.44. Yesterday the index fell by 0.41%.

As for the Fed meeting, economists note that the banking crisis is likely to complicate the task for Central Bank policymakers. Now consensus estimates suggest that the Fed will raise interest rates by 25 basis points, while before the banking turmoil there was a high probability of a 50 basis point rate hike. According to the CME FedWatch Tool, markets currently see a 81.2% chance that the Fed will raise its rates by 25 basis points, up from about 69,4% a week ago. Meanwhile, traders now expect rates to peak in May at around 4.8%.

"I think the key focus could be on the Fed speech after the decision. A hike of 0,25% plus a dovish speech may be the best outcome for both the central bank and banks," said Glenn Yin, head of research and analysis at AETOS Capital Group.